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Advent Software Reports First Quarter 2012 Results

Company Achieves Record Quarterly Revenue of $87 Million and Record First Quarter Bookings of Over $7 Million (April 30, 2012)

SAN FRANCISCO, CA -- (Marketwire) -- 04/30/12 -- Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the first quarter ended March 31, 2012.

"I'm very proud of Advent's terrific first quarter financial performance," said Stephanie DiMarco, Founder and Chief Executive Officer of Advent. "Headlining our financial results was our best first quarter ever for new bookings with annual contract value of $7.4 million, a 45% increase over the same period last year. By staying focused on our strategy of broadening our product portfolio and growing our addressable market, 2012 is off to a great start, and we remain confident about the market opportunity ahead of us."

FIRST QUARTER 2012 RESULTS

GAAP Results for Continuing Operations
The Company reported quarterly revenue of $86.9 million for the first quarter of 2012, compared to $75.3 million in the first quarter of 2011, a 15% increase.


Operating income for the first quarter of 2012 was $11.8 million, or 14% of revenue, compared to $11.5 million or 15% of revenue for the first quarter of 2011.

Net income for the first quarter of 2012 was $7.3 million compared to $7.9 million in the first quarter of 2011.

On a fully diluted basis, earnings per share in the first quarter of 2012 were $0.14 and flat when compared to the first quarter of 2011.

Operating cash flow in the first quarter of 2012 was $13.6 million, compared with $11.6 million in the first quarter of 2011, a 17% increase. Cash, cash equivalents and marketable securities totaled $141.1 million as of March 31, 2012, compared to $136.3 million as of December 31, 2011, a 3% increase.

The Company repurchased approximately 267,500 shares in the first quarter of 2012 at an average price of $25.38 per share.

Total deferred revenue as of March 31, 2012 was $174.3 million, compared to $174.9 million as of December 31, 2011.

Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the first quarter of 2012 was $19.6 million, or 23% of revenue. This represents an 11% increase over the same period last year. On a fully diluted basis, non-GAAP earnings per share were $0.24 in the first quarter of 2012 and represent a 14% increase from non-GAAP diluted earnings per share of $0.21 in the first quarter of 2011.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

FIRST QUARTER HIGHLIGHTS

  • Continued Business Momentum in Key Metrics: The Annual Contract Value (ACV) of our new contract bookings in the first quarter of 2012 will contribute $7.4 million in annual revenue once the contracts are fully implemented. Recurring revenues reached 91% of total revenue in the first quarter and our reported renewal rates are among the highest since the fourth quarter of 2008.

  • Client Success: Advent saw continued success across all of its client segments, from large hedge fund managers and their service providers, to institutional asset managers, family offices, and independent advisory firms. New clients included: Driehaus Capital Management of Chicago and Hong Kong's Myriad Asset Management Limited. Existing clients that expanded their relationship with Advent or migrated to a new Advent platform from Axys® included: The Butterfield Fulcrum Group, Emery Howard Portfolio Management, Fifth Third Asset Management, Northside Capital Management, Sands Capital Management, Scout Investments, and Willis Investment Council. Additionally, Azentus Capital Management, a Hong Kong-based hedge fund led by former Goldman Sachs executives, went live on Geneva and Tamale RMS® in the first quarter.

  • Enhanced Functionality Across Product Lines: The Company launched a major new release of its platform for asset management today, which is comprised of Advent Portfolio Exchange®, Moxy®, Advent Rules Manager®, and Advent Revenue Center®. Enhancements include a new user experience, business intelligence reporting, dashboards, and more seamless integration across all of the products. Advent also released Syncova Essentials, a lighter, cloud-based version of the Syncova product which delivers automated data aggregation and management of margin and financing costs across multiple counterparties.

  • Award-Winning Solutions: Advent continues to win accolades around the world. Recent awards include: FTF News's Most Innovative Mobile Technology award for Advent's Black Diamond platform; HFMWeek named Advent as Best Technology for Start-Up Funds; and the Company was named Best IT Provider in the 2012 Hedge Fund Journal Service Provider Awards.

FINANCIAL GUIDANCE
Advent updates the following financial guidance for the second quarter and fiscal year 2012:

---------------------------------------------------------------------------- Guidance Q2 2012 FY 2012 ---------------------------------------------------------------------------- Total Revenue ($M) $88-$90 $361-$368 ---------------------------------------------------------------------------- YoY Revenue Growth 10% - 12% 11% - 13% ---------------------------------------------------------------------------- GAAP Operating Margin n/a 14.0% - 14.5% ---------------------------------------------------------------------------- Amortization of Intangibles (% of revenue) n/a 3% ---------------------------------------------------------------------------- Stock Compensation Expense (% of revenue) n/a 6% ---------------------------------------------------------------------------- Non-GAAP Operating Margin n/a 23.0% - 23.5% ---------------------------------------------------------------------------- Operating Cash Flow ($M) n/a $90-$96 ---------------------------------------------------------------------------- Capital Expenditures ($M) n/a $13-$15 ---------------------------------------------------------------------------- Growth of Weighted Average Shares Outstanding, excluding any share repurchases n/a 0.25%-0.75% per quarter ---------------------------------------------------------------------------- Effective Tax Rate (GAAP) n/a 35% - 40% ---------------------------------------------------------------------------- Effective Tax Rate (non-GAAP) n/a 35% ----------------------------------------------------------------------------

INVESTOR CALL
Advent Software, Inc. will host its Q1 2012 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q1 2012 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com. To participate via phone, please dial (800) 265-0241 and request conference ID #41807332. Telephone replay will be available through midnight May 7, 2012. The replay number for domestic callers is (888) 286-8010, and for international callers is (617) 801-6888, with the conference ID of #12436350.

The conference call will also be webcast live and then archived on http://investor.advent.com.

ABOUT ADVENT
Advent Software, Inc. (www.advent.com), a global firm, has provided trusted solutions to the world's leading financial professionals since 1983. Firms in more than 60 countries use Advent technology. Advent's quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization. For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.

ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the accompanying tables entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures."

FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance, and statements regarding our momentum and market opportunities, and any other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva®, and Moxy® products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Company's ability to satisfy contractual performance requirements; difficulties in integrating merged businesses, such as Syncova Solutions Limited and Black Diamond Performance Reporting LLC, and achieving expected synergies and results; and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2011 annual report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Advent, the Advent logo, Advent Software, Advent Portfolio Exchange, Axys, Geneva and Moxy are registered trademarks of Advent Software, Inc., and Syncova is a mark of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.

ADVENT SOFTWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (GAAP, Unaudited) March 31 December 31 2012 2011 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 70,828 $ 65,525 Short-term marketable securities 70,258 69,908 Accounts receivable, net 59,518 62,125 Deferred taxes, current 16,300 16,294 Prepaid expenses and other 26,697 23,660 ----------- ----------- Total current assets 243,601 237,512 Property and equipment, net 41,482 42,301 Goodwill 206,476 204,621 Other intangibles, net 46,749 49,521 Long-term marketable securities - 917 Deferred taxes, long-term 30,747 30,751 Other assets 13,986 15,927 Noncurrent assets of discontinued operation 2,006 2,006 ----------- ----------- Total assets $ 585,047 $ 583,556 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 10,993 $ 10,558 Accrued liabilities 30,772 40,029 Deferred revenues 166,270 166,945 Income taxes payable 5,225 2,972 Short-term debt 5,000 5,000 Current liabilities of discontinued operation 475 488 ----------- ----------- Total current liabilities 218,735 225,992 Deferred revenues, long-term 8,068 7,926 Long-term debt 43,750 45,000 Other long-term liabilities 17,147 16,944 Noncurrent liabilities of discontinued operation 4,527 4,633 ----------- ----------- Total liabilities 292,227 300,495 ----------- ----------- Stockholders' equity: Common stock 509 510 Additional paid-in capital 434,885 429,734 Accumulated deficit (151,825) (154,053) Accumulated other comprehensive income 9,251 6,870 ----------- ----------- Total stockholders' equity 292,820 283,061 ----------- ----------- Total liabilities and stockholders' equity $ 585,047 $ 583,556 =========== =========== ADVENT SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (GAAP, Unaudited) Three Months Ended March 31 ---------------------------- 2012 2011 ------------- ------------- Net revenues: Recurring revenues $ 78,720 $ 67,327 Non-recurring revenues 8,184 7,999 ------------- ------------- Total net revenues 86,904 75,326 Cost of revenues (1): Recurring revenues 16,926 14,788 Non-recurring revenues 9,668 7,239 Amortization of developed technology 2,541 1,516 ------------- ------------- Total cost of revenues 29,135 23,543 ------------- ------------- Gross margin 57,769 51,783 Operating expenses (1): Sales and marketing 18,446 18,184 Product development 16,799 12,642 General and administrative 9,669 9,084 Amortization of other intangibles 956 320 Restructuring charges 104 26 ------------- ------------- Total operating expenses 45,974 40,256 ------------- ------------- Income from continuing operations 11,795 11,527 Interest income and other income (expense), net (172) 31 ------------- ------------- Income from continuing operations before income taxes 11,623 11,558 Provision for income taxes 4,306 3,654 ------------- ------------- Net income from continuing operations $ 7,317 $ 7,904 Discontinued operation: Net income (loss) from discontinued operation (net of applicable taxes of $(15) and $1,344, respectively) (23) 1,824 ------------- ------------- Net income $ 7,294 $ 9,728 ============= ============= Basic net income per share: Continuing operations $ 0.14 $ 0.15 Discontinued operation - 0.03 ------------- ------------- Total operations $ 0.14 $ 0.19 ============= ============= Diluted net income per share: Continuing operations $ 0.14 $ 0.14 Discontinued operation - 0.03 ------------- ------------- Total operations $ 0.14 $ 0.18 ============= ============= Weighted average shares used to compute net income per share: Basic 51,024 52,201 Diluted 53,363 55,339 (1) Includes stock-based employee compensation expense as follows: Cost of recurring revenues $ 585 $ 503 Cost of non-recurring revenues 331 247 ------------- ------------- Total cost of revenues 916 750 Sales and marketing 1,657 1,500 Product development 1,460 1,175 General and administrative 856 1,034 ------------- ------------- Total operating expenses 3,973 3,709 ------------- ------------- Total stock-based employee compensation expense $ 4,889 $ 4,459 ============= ============= ADVENT SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended March 31 ---------------------------- 2012 2011 ------------- ------------- Cash flows from operating activities: Net income $ 7,294 $ 9,728 Adjustment to net income for discontinued operation 23 (1,824) ------------- ------------- Net income from continuing operations $ 7,317 $ 7,904 Adjustments to reconcile net income to net cash providedby operating activities from continuing operations: Stock-based compensation 4,889 4,459 Excess tax benefit from stock-based compensation (1,493) (1,344) Depreciation and amortization 6,377 4,417 Amortization of debt issuance costs 95 - Provision for doubtful accounts 52 71 Provision for (reduction of) sales returns 497 (706) Deferred income taxes (27) (72) Other (151) 38 ------------- ------------- Effect of statement of operations adjustments 10,239 6,863 Changes in operating assets and liabilities: Accounts receivable 2,471 509 Prepaid and other assets (1,264) (1,453) Accounts payable 434 (670) Accrued liabilities (8,325) (5,773) Deferred revenues (1,029) 961 Income taxes payable 3,746 3,252 ------------- ------------- Effect of changes in operating assets and liabilities (3,967) (3,174) ------------- ------------- Net cash provided by operating activities from continuing operations 13,589 11,593 Cash flows from investing activities: Cash used in acquisitions, net of cash acquired (700) (24,648) Purchases of property and equipment (1,951) (1,436) Capitalized software development costs (342) (1,612) Purchases of marketable securities (33,595) (26,140) Sales and maturities of marketable securities 34,224 29,408 ------------- ------------- Net cash used in investing activities from continuing operations (2,364) (24,428) Cash flows from financing activities: Proceeds from common stock issued from exercises of stock options 1,267 3,161 Withholding taxes related to equity award net share settlement (782) (2,608) Repurchase of common stock (6,788) - Repayment of loan borrowing (1,250) - Excess tax benefits from stock-based compensation 1,493 1,344 ------------- ------------- Net cash provided by (used in) financing activities from continuing operations (6,060) 1,897 Net cash transferred from (to) discontinued operation (142) 3,078 Effect of exchange rate changes on cash and cash equivalents 280 213 ------------- ------------- Net change in cash and cash equivalents from continuing operations 5,303 (7,647) Cash and cash equivalents of continuing operations at beginning of period 65,525 81,948 ------------- ------------- Cash and cash equivalents of continuing operations at end of period $ 70,828 $ 74,301 ============= ============= Three Months Ended March 31 ---------------------------- 2012 2011 ------------- ------------- Supplemental disclosure of cash flow information Cash flow from discontiued operation: Net cash used in operating activities $ (142) $ 74 Net cash provided by investing activities - 3,004 Net cash transferred from (to) continuing operations 142 (3,078) Effect of exchange rates on cash and cash equivalents - - ------------- ------------- Net change in cash and cash equivalents from discontinued operations - - Cash and cash equivalents of discontinued operation at beginning of period - - ------------- ------------- Cash and cash equivalents of discontinued operation at end of period $ - $ - ============= ============= ADVENT SOFTWARE, INC. RECONCILIATION OF SELECTED CONTINUING OPERATIONS' GAAP MEASURES TO NON-GAAP MEASURES (In thousands, except per share data) (Unaudited)

To supplement our condensed consolidated financial statements presented on a GAAP basis, Advent uses non-GAAP measures of continuing operations' operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Advent's underlying operational results and trends and our marketplace performance. In addition, these adjusted non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States of America.

Three Months Ended March 31, 2012 for Continuing Operations ------------------------------------------------ Gross Gross Operating Operating Net Margin Margin % Income Income % Income -------- -------- ---------- --------- ------- GAAP $ 57,769 66% $ 11,795 14% $ 7,317 Amortization of acquired developed technology 1,896 1,896 1,896 Amortization of other acquired intangibles - 956 956 Stock-based compensation - cost of revenues 916 916 916 Stock-based compensation - operating expenses - 3,973 3,973 Restructuring charges - 104 104 Income tax adjustment for non-GAAP (1) - - (2,508) -------- ---------- ------- Non-GAAP $ 60,581 70% $ 19,640 23% $12,654 ======== ========== ======= Diluted net income per share GAAP $ 0.14 Non-GAAP $ 0.24 Shares used to compute diluted net income per share 53,363 Three Months Ended March 31, 2011 for Continuing Operations ------------------------------------------------ Gross Gross Operating Operating Net Margin Margin % Income Income % Income -------- -------- ---------- --------- ------- GAAP $ 51,783 69% $ 11,527 15% $ 7,904 Amortization of acquired developed technology 916 916 916 Amortization of other acquired intangibles - 320 320 Stock-based compensation - cost of revenues 750 750 750 Stock-based compensation - operating expenses - 3,709 3,709 Acquisition related expenses - 450 450 Restructuring charges - 26 26 Income tax adjustment for non-GAAP (1) - - (2,551) -------- ---------- ------- Non-GAAP $ 53,449 71% $ 17,698 23% $11,524 ======== ========== ======= Diluted net income per share GAAP $ 0.14 Non-GAAP $ 0.21 Shares used to compute diluted net income per share 55,339 (1) The estimated non-GAAP effective tax rate was 35% for the three months ended March 31, 2012 and 2011, respectively, and has been used to adjust the provision for income taxes for non-GAAP purposes. Advent Software, Inc. Reconciliation of Projected Continuing Operations' GAAP Operating Income % to Non-GAAP Operating Income % (Preliminary and unaudited)

Advent provides projections of non-GAAP measures of its continuing operations' operating income, which exclude certain costs, expenses, gains and losses which it believes is appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our projected continuing operations' GAAP results are made with the intent of providing management and investors a more complete understanding continuing operations' underlying operational results and trends and our marketplace performance. In addition, these adjusted non-GAAP projections are among the information management uses as a basis for planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States of America.

Twelve Months Ended December 31, 2012 Continuing Operations Operating Income % ------------------------ Projected GAAP 14.0% to 14.5% ======================== Projected amortization of acquired developed technologyand other acquired intangible asset adjustment 3% Projected stock-based compensation adjustment 6% ------------------------ Projected non-GAAP 23.0% to 23.5% ========================

CONTACT
Media Contact:
Smita Topolski
Advent Software, Inc.
(415) 645-1668
Email Contact

Investor Relations Contact:
Heidi Flaherty
Advent Software, Inc.
(415) 645-1145
Email Contact


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